Related savings will go to support new Gunvor Foundation
Gunvor Group (“Gunvor”) has closed an innovative US $745 million secured borrowing base facility (“Facility”) that includes performance commitments related to Gunvor’s sustainability targets. Gunvor is the first energy commodities trading company to close a financing in which the interest rate will be dependent on the company’s year-on-year improvements in areas such as transparency, governance and the environment. The Facility, originally launched at US $625 million in 2012, was a renewal to provide for the working capital requirements of the company’s Antwerp and Rotterdam refineries. It was significantly oversubscribed to US $745 million through the addition of new lenders.
The Facility was arranged by ING Bank, who acted as sole Coordinator and Active Bookrunner while maintaining its roles as Security Agent, Facility Agent and Fronting Bank. The structure for the sustainability targets was created by Gunvor in collaboration with ING Bank as the Sustainability Coordinator and supported by the consortium of banks. Gunvor will receive a discount on its interest rate if the sustainability targets have been met and vice-versa, if Gunvor severely underperforms on the sustainability targets, a premium will be added to the interest rate. This initiative will serve as a test run for a more expanded future program for the company’s financings.
“By partnering with our banks to set goals that achieve substantive results, we are demonstrating the seriousness with which we integrate sustainability into our business.” said Jacques Erni, Gunvor Group CFO.
The sustainability targets are focused on the “environment”, “social impact” and “governance”, and specifically address areas like reductions in CO2 emissions, waste and water management, improvements to personnel safety at the refineries, transparency reporting related to feedstock origination (within the parameters of the company’s support for the Extractive Industries Transparency Initiative, or EITI) and others.
“Gunvor’s imperative has always been to take actions that are meaningful and credible, and we have worked closely with our banking partners to keep ahead of the market’s evolving expectations for sustainability in business and finance,” said Ben Winterton, Gunvor Group’s head of HSEC (health, safety, environment, human rights and communities).
Related savings from the potentially lower interest rate will go to supplement funding for the recently launched Gunvor Foundation, the company’s not-for-profit entity dedicated to philanthropic giving.
“ING is happy to be Gunvor’s partner in its sustainability journey. We expect this innovative transaction will serve as an example of how we and our peers can provide energy commodity trading clients with financial solutions which also address the key sustainability challenges in this sector,” said Patrick Arnaud, managing director for Trade Commodity Finance at ING Bank.
The Facility’s increase was made possible thanks to the continuous support of the original lenders renewing and some increasing their participation levels, together with new entrants.
The banks participating in the Facility are as follows:
- ING Belgium, Brussels, Geneva Branch
- DBS Bank Ltd., London Branch
- Société Générale
- Cooperatieve Rabobank U.A.
- ABN Amro Bank N.V.
- CA Indosuez (Switzerland) SA
- Credit Suisse (Switzerland) Ltd.
- Mizuho Bank Europe N.V.
- Nedbank Limited, London Branch
- Sumitomo Mitsui Trust Bank, Limited (London Branch)
- UniCredit Bank AG
- KfW IPEX-Bank GmbH
- MUFG Bank, Ltd.
- Raiffeisen Bank International AG
About Gunvor Group
Gunvor Group is one of the world’s largest independent commodities trading houses by turnover, creating logistics solutions that safely and efficiently move physical energy from where it is sourced and stored to where it is demanded most. With strategic investments in industrial infrastructure—refineries, pipelines, storage, terminals, mining and upstream—Gunvor further generates sustainable value across the global Definition: A supply chain refers to the entire process involved in the production, distribution, and delivery of goods or services, from the extraction of raw materials to the final consumption... Read more for its customers. More information can be found at www.GunvorGroup.com or @Gunvor.
About Gunvor Foundation
Gunvor Foundation provides scholarships, grants, and donations (impact investing) for initiatives that further the mission of empowering individuals to contribute meaningfully to the development of healthy communities, the reduction of poverty, and the improvement of environmental conditions on local and global levels. More information can be found at www.Gunvor-Foundation.com
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